28% of Ethereum Supply Now Staked as Only 10% Remains on Exchanges: Is This a Bullish Sign?

Ethereum has achieved a significant milestone, with over 28% of its total supply now staked, as observed by crypto researcher Leon Waidmann.

In an update on X, Waidmann highlighted that ETH staking is at an unprecedented level, with only 10% of Ethereum currently held on crypto exchanges. This record confirms the growing confidence in Ethereum’s future and the community’s dedication to securing the network through staking.

Decline in Exchange Holdings

The drastic reduction in Ethereum held on exchanges, as seen in the chart below, has drawn attention. The percentage has fallen to approximately 10%, marking a significant decrease from previous levels. Notably, this trend highlights a movement towards staking and long-term holding, reducing the available supply for trading.

Ethereum on Exchanges | CryptoQuant

Since last year, the reserve of Ethereum on exchanges has dropped from around 20 million to 17 million. This decline in reserves coincides with price fluctuations, including a notable increase from early 2024. The trend suggests that as ETH leaves exchanges, possibly for private wallets or staking, the price tends to rise, reflecting increased investor confidence and long-term holding.

Moreover, market data from CryptoQuant depicts a steady uptrend in the amount of ETH tokens going into staking contracts over the past year. Currently, over 33.9 million tokens are locked, valued at over $111 billion.

Ethereum Staked | CryptoQuant

Emphatically, the combination of reduced supply on exchanges and increased staking rates suggests a significant supply squeeze, which could impact Ethereum’s price dynamics.

Further, as the supply on exchanges dwindles and more ETH is locked up in staking, the buying pressure is likely to drive prices higher, pointing towards a significant upcoming price surge, as suggested by Waidmann.

Technical Indicators Point to Bullish Outlook

Technical indicators like the RSI, which currently stands at 56.92, highlight bullish trends, further supporting a positive outlook for Ethereum.

Typically, an RSI value above 50 indicates a bullish trend, and the current value near 57 suggests Ethereum is in slightly bullish territory. Notably, the RSI is not overbought (above 70) or oversold (below 30), indicating no extreme buying or selling pressure at present.

Staking By Reactivated Whales

Moreover, other previously dormant Ethereum whales are also reawakening with significant transfers, some specifically for staking. In May, a dormant Ethereum whale made headlines when it staked 4,032 ETH, valued at $7.4 million, after over two years of inactivity.

This whale initially acquired 60,000 ETH during the Genesis block in 2015. This activity may have been tied to Ethereum’s “Shanghai” upgrade, which enhanced the network’s scalability and performance. These movements further highlight significant on-chain activities, indicating increased confidence in Ethereum’s future.

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